Five Of Our Favorite Things About NJ Online Gambling’s Fifth Anniversary
Nov. 21, 2018, marked the five-year anniversary of the launch of NJ online gambling.
Flash forward to October 2018. A few days before the anniversary, revenue numbers for October were released. It now appears, with $242,748,565 in online gambling revenue posted so far this year, NJ online gambling is well on its way to setting a new revenue record in 2018.
The number of NJ online casinos and online poker sites has almost doubled in the five short years the budding industry has been around. Revenues are clearly through the roof. There are even online and mobile NJ sports betting available in the Garden State now.
The NJ online gambling landscape has changed dramatically, to say the least. That means there have been plenty of stories worth telling over the past five years. Here’s a look at five that have defined the dramatic rise of online gambling in New Jersey thus far:
Every great story must start somewhere. The successful tale of the NJ online gambling industry began Nov. 21, 2013, with the synchronized soft launch of seven online casinos and six online poker sites.
The lucky 13 original NJ online gambling sites kicked off operating under licenses issued to six Atlantic City casinos:
The launch was synchronized to make sure all of the original operators began on equal footing. Each went through the same licensing and testing process on the same timeline.
Of course, Golden Nugget was part of it, but technical issues forced it to back off during the testing period. There will be more on its launch later, but back in November 2013, Golden Nugget was not one of the original 13 NJ online gambling sites.
Of course, Trump Plaza and Trump Taj Mahal have since shut down, and the number of operating NJ online gambling sites has gone up and down over the years. It now sits at a whopping 25, almost double the original 13. Plus, there are currently eight online and mobile sports betting operations taking bets online.
Five years in, the industry is as robust and healthy as ever. However, it all began Nov. 21, 2013, with the synchronized launch of a lucky 13 NJ online gambling sites.
Golden Nugget’s meteoric rise
As mentioned above, when NJ online gambling launch in November 2013, it did so without Golden Nugget.
Technical issues forced Golden Nugget to go offline and it wasn’t able to get back on until the New Jersey Division of Gaming Enforcement gave operators the thumbs up to do so in mid-December 2013.
So the first year of NJ online gambling was dominated by Borgata and Caesars. Golden Nugget started as the lowest revenue generating player in the industry. However, it kept fighting the good fight, and by April 2015, a little less than a year and a half after it launched, Golden Nugget became the top revenue generating site in the industry.
It turns out the delay was the best thing that could have happened to Golden Nugget.
It gave the operation a chance to make sure its NJ online casino product was solid before it went live. Plus, most of the competition blew out the marketing budgets at launch and had scaled things back by the time Golden Nugget even started. This allowed Golden Nugget to market itself more effectively with less competitive noise drowning out its message.
Live dealer and 400-plus
Golden Nugget spent the next few years becoming the first NJ online casino to launch live dealer games and the first to offer 400-plus games. It turns out these were exactly the kind of things NJ online gamblers wanted and a meteoric rise in revenue followed.
Golden Nugget inked deals to allow Betfair and SugarHouse to run NJ online casinos under its license, and before long, the overall operation was regularly setting revenue records. In fact, in October 2018, with the NJ online gambling posting a record monthly revenue total of $26.75 million, Golden Nugget set a personal and state record all on its own.
Its $9,674,550 in October 2018 revenue marked the first time a single entity surpassed $9 million in monthly online gambling revenue. Now, Golden Nugget is quickly closing in on the $10 million monthly revenue mark before any other operation has even hit $5 million.
It’s a rags-to-riches story that has come to represent the best of NJ online gambling. NJ online gambling itself would not be anywhere near where it is today without the meteoric rise of Golden Nugget.
The PokerStars blip
Let’s face it. Online poker makes headlines while online casinos make money. Revenue numbers for the NJ online poker side of things have never amounted to more than 10 percent of total NJ online gambling numbers. Plus, the numbers keep on dropping.
When NJ online gambling was just a baby, there was some hope online poker could earn its keep if a major player such as PokerStars was allowed to open up shop.
That day came on March 16, 2016, after the DGE gave PokerStars the go ahead and the world’s largest poker site went live with a fenced-in NJ site.
PokerStars NJ quickly rose to the top of the market. However, the truth is, outside of the first couple of months, it has done very little to help the total online poker market in New Jersey expand.
Total online poker cash game traffic jumped 20 percent after PokerStars NJ went live. Monthly poker revenue went up 25 percent. However, three months later, the numbers were back to where they started. After treading water for a while, earlier this year, online poker revenue numbers dropped to the lowest point since launch.
PokerStars clearly hasn’t had an impact on the market most have hoped. However, PokerStars itself isn’t to blame.
With a population of 9 million people, the NJ market is just too small. Until online poker expands to a few more US states and New Jersey signs agreements to share player pools with them, NJ online poker numbers will continue to disappoint.
Unfortunately, there isn’t much PokerStars can do about it.
The multistate myth
In late 2017, New Jersey signed on to the multistate agreement allowing online poker sites to share player pools with others in Nevada and Delaware. It was supposed to be a game changer.
However, the WSOP/888 Poker network is the only one with sites in all three states. Therefore, it’s the only one even close to seeing the benefits of the agreement.
Shared liquidity launched May 1, 2018. For the first time, online poker players in Nevada, New Jersey, and Delaware were able to play against each other. Things looked good for a while. Numbers were up for things like the World Series of Poker online bracelet events.
However, they’ve come back down to earth rather quickly.
The WSOP/888 Poker network in NJ did manage to post $671,315 in revenue in September. It moved into the top spot in the state over PokerStars. However, its 20 percent jump from September 2017 numbers hasn’t helped boost the overall NJ online poker revenue one bit.
NJ online poker revenue hit just $1.6 million in September 2018. Every online poker site in the state posted month-over-month decreases from August.
Shared liquidity has doubled the size of the market, but it’s still not enough.
Pennsylvania is getting ready to launch its own fenced-in online poker market. Plus, there’s hope it will be the next state to sign the agreement in about a year. That will more than double the market again and should start to give US online poker some momentum.
However, until larger states such as California and New York get on board, the disappointing revenues will likely continue.
Turning around a decade of declines
Online poker numbers have been disappointing, but overall NJ online gambling numbers have been great. The numbers have been so good that in 2016, they helped the Atlantic City casino industry turn around decades of declines.
That’s right, for the first time in a decade, Atlantic City casino revenues rose in 2016. And, it was all thanks to a major jump in online gambling revenue.
Atlantic City casinos posted a total win of $2.406 billion in 2016. The numbers were actually down 0.3 percent from $2.414 billion in 2015. However, thanks to $196.7 million in online gambling revenue, a 32.1 percent jump over 2015, the total industry win hit $2.603 billion. This represented a 1.5 percent increase over 2015.
Atlantic City had turned itself around and NJ online casinos were the catalyst.
In 2017, it happened again, with the NJ online gambling industry generating $245.6 million in revenue, up 24.9 percent. Those numbers helped AC casinos post gains for the second straight year.
There’s still some time left in 2018. However, all indications are it’ll be another record year for the NJ online gambling industry. That should also mean gains in the Atlantic City casino industry for the third year in a row.
Of course, much of the credit still goes to NJ online gambling as it celebrates its five-year anniversary in style.